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Re: Manhattan Club Lawsuit (by Gerald C.):

We should thank Jeff for providing the link to the court transcript. I read it and have the following comments.

The whole timeshare arrangement is a convoluted mess that offers any explanation possible re who is at fault in a “he said-she said” argument. For example, the defendants maintain that most of the owners love their shares and are not complaining. Owners have lost all court cases to date on technicalities and the defendant’s attorneys are again arguing many technicalities re the current complaint. The only good thing about this case is that it is still going on and it was not dropped on day 1.

At this point it is unclear how far the case has progressed. It appears that the last 2 years have largely been ‘discovery’ and actual arguments may not have been developed in front of the judge. The AG is trying to depose the defendants who are playing hard to get but once that is done the record seems to indicate the case is ‘completed’. However, it also seems to me that the judge does not have much of a grasp of the case so far e.g. she has not seen the offering plan- and if she reads it then ‘which version’.

If we assume from this record that the case is nearly over then I do not see that there is a ‘slam dunk’ for the AG because the Judge does not seem to be deeply invested in the process. She may interpret the current situation such that owners who protest by not paying their fees are the real source of the problem and should be punished rather than “string up Eichner et al.” Indeed, to the uninitiated, the only way the Judge can understand our situation is to buy a share herself and try to get a room. Explaining in court how screwed up the process is may be too complicated.

Those owners who have gone to the shareholders meetings, tried to sell their shares, and complained about fees etc. all know that the major response made by management is that “it is all in the prospectus” (in retrospect- if you buy a house the mortgage is 5-10 pages, the fact that buying a share of the MC requires one to read and understand a giant prospectus should have told us something before we were foolish enough to get involved). If the AG’s case is going to break this cycle then the AG will have to make an obvious case that convicts them on some gross violation e.g. ‘lying salesmen’ or ‘Urban management was grossly a scam’-it must be obvious to this Judge. That the AG can do this was not obvious to me in this transcript.